Work:Life UK: Are employees being offered the benefits they really want?

The strength of a benefits package can be a crucial factor for potential employees in deciding whether to join a company – especially in the current financial climate. Taking results from research commissioned by the Guardian in association with income protection provider Unum, we look at whether employers are offering the right incentives

What benefits do employees really want? It may sound like a simple question, but bosses have been trying to figure this out for years. Companies may think they know what their staff want, but the reality can often prove to be different – one high-street bank found 70% of staff said they wanted subsidised gyms; but when provided, take-up was only 3%. So how do employers find out what their employees really want?

According to Paul Bartlett, head of reward at employee benefits provider Grass Roots, bosses need to listen to what their staff tell them, particularly because the current economic situation means traditional differences in benefits sought by different age groups – something that used to be quite distinct – are becoming more blurred.

"You used to be able to rely on young workers typically wanting immediate things: bonuses, discretionary perks, holidays; while the 30- to 40-year-olds wanted childcare benefits, and the older generation looked more to income-related benefits, like pensions," he says. "But joblessness, economic uncertainty and rising inflation is causing a shift in the sorts of benefits staff want – and it is having a unifying impact across the age groups."

Bartlett believes "nice-to-have" extras, such as gyms or sabbaticals, are out of favour. People are going back to basics, preferring cash-related benefits or income security. For example, new data from the UK Voucher Association reports that sales of money-off vouchers to businesses to offer their staff have risen 22.8% in the first quarter of 2011.

Work:Life UK 2011, a survey of 5,002 employees carried out by ICM on behalf of the Guardian and Unum, substantiates this trend. The top three benefits currently offered to employees are pensions (48%), free parking (30%) and flexible working (22%). But there is evidence that this is not the range of benefits they find most important right now, or what they would necessarily choose. Free parking, for example, is deemed the most important benefit by just 12% of respondents.

When it comes to benefits that employees don't receive but would like, health insurance comes top, coveted by 29% of respondents, followed by working from home (22%) and a company car (20%). Income protection, currently only received by 2% of employees, was the fourth most desired benefit, with 19% choosing it.

Benefits such as gym membership, sabbaticals and salary-sacrifice related benefits were all significantly lower in people's importance – yet these remain widely offered.

David Fairhurst, chief people officer for McDonald's, says more companies must have discussion with their staff about what they want, and what can realistically be provided. "We're in tight times. Staff want benefits that mean something to them, and that are appropriate to their worries."

For many employees, a major worry is their health, and the impact on their lives if illness hits them. Eleven per cent of workers have already been off ill for six months or more during the past year, and a further one-third of employees fear getting ill and not having their income protected.

"Often, people don't realise the full value of protecting their income until they need to," says Bartlett. "But we're finding that as soon as people understand the benefit that something like income protection can provide, in this climate, it quickly becomes a very welcome add-on indeed."